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Using consumer financing to close sales

February 11, 2016 -  By

How offering financing could help you close more, larger sales.

Would you like to increase the scale of your clients’ projects, close more jobs and avoid having to track down payments? Offering consumer financing might be an option for you, say contractors who’ve walked that path. Here, two of them share their experiences.


Mike Sanders, president

Company: Crimson Valley Landscaping, Rockford, Ill.

Financing partner: Rock Valley Credit Union

How long offering? About 10 years, first through a different lender

Financing offers: No standard offer; clients work with the bank

How many clients participate? A few per year

Cost to the contractor: “We looked at some other options with the national companies that do this, and our costs on those are a little beyond our comfort zone,” Sanders said, estimating they were 8-10 percent. The company pays no fee to work with the credit union.

Client process: In-person or online application with the lender

Contractor process: On large jobs, clients submit a form to the bank authorizing a draw. On small jobs, clients typically write a check to Crimson Valley for a start payment. Upon completion, the client signs off on the project and the bank direct deposits the payment within 48 hours.

Biggest benefit to the contractor: “It’s a sales advantage because some other companies aren’t able to offer it. And instead of doing the bare minimum, customers can look at the total scope of a project.”

Biggest benefit to the consumer: “A customer’s budget doesn’t always match the design or project. By providing someone who will give them a loan, they’re getting the time they need to be comfortable spending the money.”

Marketing/sales strategy: Website (links to bank’s loan application); information included in sales packet and discussed on sales calls

Best Advice: “Know who you’re dealing with. That’s where the local credit union has been really good. When you’re connecting your customer to somebody, you need to know they’re following your core values and operational philosophy.”



Jimmy Tompkins, owner

Company: JT’s Landscaping & Lawn Care, Rolesville, N.C.

Financing partner: EnerBank USA via the Belgard Preferred Payment program

How long offering? About seven years, first through a different lender

Financing offers: Zero percent financing for 12 months or 18 months

How many clients participate: 30-40 per year

Cost to the contractor: “The dealer fee is 5.3 percent, so we factor that into our estimates. If people ask for a discount, we say we have a 5 percent cash discount, so we recapture that indirectly.”

Client process: Phone conversation with the lender; email or mail approval

Contractor process: Upon financing approval, JT’s Landscaping submits an invoice to the lender and receives a 50 percent draw. Upon project completion, the client submits a payment authorization form to the lender, which pays the company electronically.

Biggest Benefit to the contractor: “We get paid within two days of the project’s completion. There’s no back and forth with the client. It’s very nice from a cash flow perspective.”

Biggest benefit to the consumer: “It’s free money, essentially. On a $30,000 project, anybody with economic sense realizes they’ll recapture (that 5 percent) by
keeping that cash in the bank.”

Marketing/sales strategy: Website; used as a “back pocket” tool in sales presentations

Best advice: “You’re getting an extra tool in your back pocket to close the sale; it’s more leverage over competitors who can’t offer this. If your price is 5 percent more—that’s nothing over 18 months. We won’t come down on price, so this is something we wave in front of them.”

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Marisa Palmieri

About the Author:

Marisa Palmieri is an experienced Green Industry editor who's won numerous awards for her coverage of the landscape and golf course markets from the Turf & Ornamental Communicators Association (TOCA), the Press Club of Cleveland and the American Society of Business Publication Editors (ASBPE). In 2007, ASBPE named her a Young Leader. She graduated with a Bachelor of Science in Journalism, cum laude, from Ohio University’s Scripps School of Journalism.

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